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What should the capital gains tax be?

The capital gains tax is a tax on investments. It's a flat tax. It used to be 20%. It's now 15%. Making money investing is very different from a regular job where you get an hourly wage or a regular salary. Investing is a calculated risk. Even the very best investors sometimes lose money. With that in mind, what rate do you think capital gains should be?

Re: What should the capital gains tax be?

The extent to which you tax is the extent to which you discourage the activity you are taxing. Some activities are more elastic than others; investment has proven itself to be much more responsive to tax policy than, for example, income.

So, I would suggest you tax capital gains precisely to the degree which you wish to discourage investment in American business and the creation of American jobs.

Re: What should the capital gains tax be?

Leave the cap gains tax as it is.
But make it more progressive, to encourage lower income people to invest.

I say it should be 0 for middle and lower income classes.

I was discovering that life just simply isn't fair and bask in the unsung glory of knowing that each obstacle overcome along the way only adds to the satisfaction in the end. Nothing great, after all, was ever accomplished by anyone sulking in his or her misery.
—Adam Shepard

Re: What should the capital gains tax be?

Capital gains are income, why would it be treated as anything other than income?

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Re: What should the capital gains tax be?

Originally Posted by Redress

Capital gains are income, why would it be treated as anything other than income?

It's funky.
First off, capital gains aren't guaranteed like a paycheck based income.
Secondly, you have to risk capital, to have the chance to earn a capital gain.
Third, it can be deferred for many, many years.

It's not the same type of income and there is much more risk involved, with less ability to write off losses.

Last edited by Harry Guerrilla; 04-30-12 at 07:10 AM.

I was discovering that life just simply isn't fair and bask in the unsung glory of knowing that each obstacle overcome along the way only adds to the satisfaction in the end. Nothing great, after all, was ever accomplished by anyone sulking in his or her misery.
—Adam Shepard

Re: What should the capital gains tax be?

Originally Posted by Redress

Capital gains are income, why would it be treated as anything other than income?

Investment is risky, and if you lose money, you're not allowed to write it off. For example, you could make 10 million one year, but lose 5 million the next. In that losing year, you don't get reverse taxes. You don't get the -15% back in the form of a rebate.

Re: What should the capital gains tax be?

Originally Posted by Luna Tick

The capital gains tax is a tax on investments. It's a flat tax. It used to be 20%. It's now 15%. Making money investing is very different from a regular job where you get an hourly wage or a regular salary. Investing is a calculated risk. Even the very best investors sometimes lose money. With that in mind, what rate do you think capital gains should be?

If the asset is owned less than a year, the gain is taxed as normal income. The advantages are gained when the asset is owned over a year... that's when the lower rate kicks in. Today that rate is 15%, which is the same marginal rate as a single person who earns between $8,500 and $34,500.

In 1988 President Reagan set both rates at 28%, then in the late 90's in a deal Clinton lowered the capital gains tax rate to 20% and of course President Bush lowered it to %15.